by Ken Follett
Augusta stood up and went to the fireplace. Hugh wondered whether she would try to defend her son, but she was not that foolish. "Never mind whose fault it is," she said. "We must salvage what we can. There must be quite a lot of cash in the bank still, gold and bank notes. We must get it out and hide it somewhere safe before the creditors move in. Then--"
Hugh interrupted her. "We'll do no such thing," he said sharply. "It's not our money."
"Of course it's our money!" she cried.
"Be quiet and sit down, Augusta, or I'll have the footmen throw you out."
She was sufficiently surprised to shut up, but she did not sit down.
Hugh said: "There is cash at the bank, and as we have not officially been declared bankrupt, we can choose to pay some of our creditors. You'll all have to dismiss your servants; and if you send them to the side door of the bank with a note of how much they are owed I will pay them off. You should ask all tradesmen with whom you have accounts to give you a statement, and I will see that they are paid too--but only up to today's date: I will not pay any debts you incur from now on."
"Who are you to tell me to dismiss my servants?" Augusta said indignantly.
Hugh was prepared to feel sympathy for their plight, even though they had brought it on themselves; but this deliberate obtuseness was very wearying, and Hugh snapped at her: "If you don't dismiss them they will leave anyway, because they won't get paid. Aunt Augusta, try to understand that you haven't got any money."
"Ridiculous," she muttered.
Nora spoke again. "I can't dismiss our servants. It's not possible to live in a house like this with no servants."
"That need not trouble you," Hugh said. "You won't be living in a house like this. I will have to sell it. We will all have to sell our houses, furniture, works of art, wine cellars and jewelry."
"This is absurd!" Augusta cried.
"It's the law," Hugh retorted. "Each partner is personally liable for all the debts of the business."
"I'm not a partner," said Augusta.
"But Edward is. He resigned as Senior Partner but he remained a partner, on paper. And he owns your house--Joseph left it to him."
Nora said: "We have to live somewhere."
"First thing tomorrow we must all look for small, cheap houses to rent. If you pick something modest our creditors will sanction it. If not you will have to choose again."
Augusta said: "I have absolutely no intention of moving house, and that's final. And I imagine the rest of the family feel the same." She looked at her sister-in-law. "Madeleine?"
"Quite right, Augusta," said Madeleine. "George and I will stay where we are. All this is foolishness. We can't possibly be destitute."
Hugh despised them. Even now, when their arrogance and foolishness had ruined them, they still refused to listen to reason. In the end they would have to give up their illusions. But if they tried to cling to wealth that was no longer theirs, they would destroy the family's reputation as well as its fortune. He was determined to make them behave with scrupulous honesty, in poverty as in wealth. It was going to be an uphill struggle but he would not give in.
Augusta turned to her daughter. "Clementine, I'm sure you and Harry will take the same view as Madeleine and George."
Clementine said: "No, Mother."
Augusta gasped. Hugh was equally startled. It was not like his cousin Clementine to go against her mother. At least one family member had some common sense, he thought.
Clementine said: "It was listening to you that got us all into this trouble. If we had made Hugh Senior Partner, instead of Edward, we would all still be as rich as Croesus."
Hugh began to feel better. Some of the family understood what he had tried to do.
Clementine went on: "You were wrong, Mother, and you've ruined us. I'm never going to heed your advice again. Hugh was right, and we had better let him do all he can to guide us through this dreadful disaster."
William said: "Quite right, Clementine. We should do whatever Hugh advises."
The battle lines were drawn. On Hugh's side were William, Samuel, and Clementine, who ruled her husband Sir Harry. They would try to behave decently and honestly. Against him were Augusta, Edward, and Madeleine, who spoke for Major Hartshorn: they would try to snatch what they could and let the family's reputation go to hell.
Then Nora said defiantly: "You'll have to carry me out of this house."
There was a bitter taste in Hugh's mouth. His own wife was joining the enemy. "You're the only person in the room who has gone against their husband or wife," he said sadly. "Don't you owe me any loyalty at all?"
She tossed her head. "I didn't marry you to live in poverty."
"All the same you will leave this house," he said grimly. He looked at the other diehards: Augusta, Edward, Madeleine and Major Hartshorn. "You will all have to give in, eventually," he said. "If you don't do it now, with dignity, you'll do it later, in disgrace, with bailiffs and policemen and newspaper reporters in attendance, vilified by the gutter press and slighted by your unpaid servants."
"We shall see about that," said Augusta.
When they had all gone Hugh sat staring into the fire, racking his brains for some way to pay the bank's creditors.
He was determined not to let Pilasters go into formal bankruptcy. The idea was almost too painful to contemplate. All his life he had lived under the shadow of his father's bankruptcy. His whole career had been an attempt to prove he was not tainted. In his heart of hearts he feared that if he suffered the same fate as his father, he too might be driven to take his own life.
Pilasters was finished as a bank. It had closed its doors on its depositors, and that was the end. But in the long term it ought to be able to repay its debts, especially if the partners were scrupulous about selling all their valuable possessions.
As the afternoon faded into twilight, the outlines of a plan began to form in his mind, and he allowed himself the faintest glimmer of hope.
At six P.M. he went to see Ben Greenbourne.
Greenbourne was past seventy, but still fit, and he continued to run the business. He had a daughter, Kate, but Solly had been his only son; so when he retired he would have to hand over to his nephews, and he seemed reluctant to do that.
Hugh called at the mansion in Piccadilly. The house gave the impression not just of prosperity but of limitless wealth. Every clock was a jewel, every stick of furniture a priceless antique; every panel was exquisitely carved, every carpet specially woven. Hugh was shown into the library, where gaslights blazed and a fire roared. In this room he had first learned that the boy called Bertie Greenbourne was his son.
Wondering if the books were just for show, he glanced at several while he was waiting. Some might have been chosen for their fine bindings, he thought, but others were well thumbed, and several languages were represented. Greenbourne's learning was genuine.
The old man appeared fifteen minutes later, and apologized for keeping Hugh waiting. "A domestic problem detained me," he said with clipped Prussian courtesy. His family had never been Prussian; they had copied the manners of upper-class Germans then retained them through a hundred years of living in England. He held himself as straight as ever, but Hugh thought he looked tired and worried. Greenbourne did not say what the domestic problem was and Hugh did not ask.
"You know that Cordovan bonds have crashed this afternoon," Hugh said.
"Yes."
"And you probably heard that my bank has closed its doors as a result."
"Yes. I am very sorry."
"It's twenty-four years since the last time an English bank failed."
"That was Overend and Gurney. I remember it well."
"So do I. My father went broke and hanged himself in his office in Leadenhall Street."
Greenbourne was embarrassed. "I am most terribly sorry, Pilaster. That dreadful fact had slipped my mind."
"A lot of firms went down in that crisis. But much worse will happen tomorrow." Hugh leaned forward on his stool
and began his big pitch. "In the last quarter of a century the business done in the City has increased tenfold. And because banking has become so sophisticated and complex, we are all more closely intertwined than ever. Some of the people whose money we have lost will be unable to pay their debts, so they will go bust too--and so on. Next week dozens of banks will fail, hundreds of businesses will be forced to close, and thousands upon thousands of people will suddenly find themselves destitute--unless we take action to prevent it."
"Action?" said Greenbourne with more than a hint of irritation. "What action can be taken? Your only remedy is to pay your debts; you cannot do so; therefore you are helpless."
"Alone, yes, I'm helpless. But I am hoping that the banking community will do something."
"Do you propose to ask other bankers to pay your debts? Why should they?" He was getting ready to be angry.
"You'll agree, surely, that it would be better for all of us if Pilasters' creditors could be paid in full."
"Obviously."
"Suppose a syndicate of bankers were formed to take over both the assets and the liabilities of Pilasters. The syndicate would guarantee to pay any creditor on demand. At the same time, it would begin to liquidate Pilasters' assets in an orderly fashion."
Suddenly Greenbourne was interested, and his irritability vanished as he considered this novel proposal. "I see. If the members of the syndicate were sufficiently respected and prestigious, their guarantee might be enough to reassure everyone, and creditors might not demand their cash immediately. With luck, the flow of money coming in from the sale of assets might cover the payments to creditors."
"And a dreadful crisis would be averted."
Greenbourne shook his head. "But in the end, the members of the syndicate would lose money, for Pilasters' liabilities are greater than its assets."
"Not necessarily."
"How so?"
"We have more than two million pounds' worth of Cordova bonds which are today valued at nothing. However, our other assets are substantial. A lot depends on how much we can raise by the sale of the partners' houses, and so on; but I estimate that even today the shortfall is only a million pounds."
"So the syndicate must expect to lose a million."
"Perhaps. But Cordova bonds may not be worthless forever. The rebels may be defeated. Or the new government may resume interest payments. At some point the price of Cordova bonds will rise."
"Possibly."
"If the bonds came up to just half their previous level, the syndicate would break even. And if they did better than that, the syndicate would actually make a profit."
Greenbourne shook his head. "It might work, but for those Santamaria harbor bonds. That Cordovan Minister, Miranda, strikes me as an out-and-out thief; and his father is apparently the leader of the rebels. My guess is that the whole two million pounds has gone to pay for guns and ammunition. In which case investors will never see a penny."
The old boy was as sharp as always, Hugh thought: he had exactly the same fear. "I'm afraid you may be right. All the same there's a chance. And if you allow a financial panic you're sure to lose money in other ways."
"It's an ingenious plan. You always were the cleverest of your family, young Pilaster."
"But the plan depends on you."
"Ah."
"If you agree to head the syndicate, the City will follow your lead. If you refuse to be part of it, the syndicate will not have the prestige to reassure creditors."
"I see that." Greenbourne was not the man for false modesty.
"Will you do it?" Hugh held his breath.
The old man was silent for several seconds, thinking, then he said firmly: "No, I won't."
Hugh slumped in his chair. It was his last shot and it had failed. He felt a great weariness descend on him, as if his life were over and he were a tired old man.
Greenbourne said: "All my life I have been cautious. Where other men see high profits, I see high risks, and I resist the temptation. Your uncle Joseph was not like me. He would take the risk--and he pocketed the profits. His son Edward was worse. I say nothing about you: you have only just taken over. But the Pilasters must pay the price for their years of high profits. I didn't take those profits--why should I pay your debts? If I spend money to rescue you now, the foolish investor will be rewarded and the careful one will suffer. And if banking were run that way, why should anyone be cautious? We might as well all take risks, for there is no risk when failed banks can always be rescued. But there is always risk. Banking cannot be run your way. There will always be crashes. They are necessary to remind good and bad investors that risk is real."
Hugh had wondered, before coming here, whether to tell the old man that Micky Miranda had murdered Solly. Now he considered it again, but he came to the same conclusion: it would shock and distress the old man but it would do nothing to persuade him to rescue Pilasters.
He was casting about for something to say, some last attempt to change Greenbourne's mind, when the butler came in and said: "Pardon me, Mr. Greenbourne, but you asked to be called the moment the detective arrived."
Greenbourne stood up immediately, looking agitated, but his courtesy would not let him rush out without an explanation. "I'm sorry, Pilaster, but I must leave you. My granddaughter Rebecca has ... disappeared ... and we are all distraught."
"I'm so sorry to hear that," Hugh said. He knew Solly's sister Kate, and he had a vague memory of her daughter, a pretty dark-haired girl. "I hope you find her safe and well."
"We don't believe she has suffered violence--in fact we're quite sure she has only run off with a boy. But that's bad enough. Please excuse me."
"By all means."
The old man went out, leaving Hugh amid the ruins of his hopes.
Section 3
MAISIE SOMETIMES WONDERED if there was something infectious about going into labor. It often happened, in a ward full of women nine months pregnant, that days would go by without incident, but as soon as one started labor the others would follow within hours.
It had been like that today. It had started at four o'clock in the morning and they had been delivering babies ever since. The midwives and nurses did most of the work, but when they were overstretched Maisie and Rachel had to leave their pens and ledgers and scurry around with towels and blankets.
By seven o'clock, however, it was all over, and they were enjoying a cup of tea in Maisie's office with Rachel's lover, Maisie's brother Dan, when Hugh Pilaster came in. "I bring very bad news, I'm afraid," he said right away.
Maisie was pouring tea but his tone of voice shocked her and she stopped. Looking hard at his face she saw that he was grief-stricken, and she thought someone must have died. "Hugh, what has happened?"
"I think you keep all the hospital's money in an account at my bank, don't you?"
If it was only money, Maisie thought, the news could not be that bad.
Rachel answered Hugh's question. "Yes. My father handles the money, but he has kept his own private account with you ever since he became the bank's lawyer, and I suppose he found it convenient to do the same with the hospital's account."
"And he invested your money in Cordova bonds."
"Did he?"
Maisie said: "What's wrong, Hugh? For goodness' sake tell us!"
"The bank has failed."
Maisie's eyes filled with tears, not for herself but for him. "Oh, Hugh!" she cried. She knew how much he was hurting. For him this was almost like the death of a loved one, for he had invested all his hopes and dreams in the bank. She wished she could take some of the pain into herself, to ease his suffering.
Dan said: "Good God. There will be a panic."
"All your money has gone," Hugh said. "You'll probably have to close the hospital. I can't tell you how sorry I am."
Rachel was white with shock. "That's not possible!" she said. "How can our money be gone?"
Dan answered her. "The bank can't pay its debts," he said bitterly. "That's what bankruptcy means, it mea
ns you owe people money and you can't pay them."
In a flash of recollection Maisie saw her father, a quarter of a century earlier looking much as Dan did today, saying exactly the same thing about bankruptcy. Dan had spent much of his life trying to protect ordinary people from the effects of these financial crises--but so far he had achieved nothing. "Perhaps now they'll pass your Banking Bill," she said to him.
Rachel said to Hugh: "But what have you done with our money?"
Hugh sighed. "Essentially this happened because of something Edward did while he was Senior Partner. It was a mistake, a huge mistake, and he lost a lot of money, more than a million pounds. I've been trying to hold everything together since then, but today my luck ran out."
"I just didn't know this could happen!" said Rachel.
Hugh said: "You should get some of your money back but not for a year or more."
Dan put his arm around Rachel but she would not be consoled. "And what is going to happen to all the wretched women who come here for help?"
Hugh looked so wounded that Maisie wanted to tell Rachel to shut up. "I would gladly give you the money out of my own pocket," he said. "But I've lost everything too."
"Surely something can be done?" she persisted.
"I did try. I've just come from Ben Greenbourne's house. I asked him to rescue the bank and pay the creditors, but he refused. He has troubles of his own, poor man: apparently his granddaughter Rebecca has run off with her boyfriend. Anyway, without his support nothing can be done."
Rachel stood up. "I think I'd better go and see my father."
"I must go to the House of Commons," Dan said.
They went out.
Maisie's heart was full. She was dismayed at the prospect of closing the hospital, and rocked by the sudden destruction of all she had worked for; but most of all she ached for Hugh. She recalled, as if it were yesterday, the night seventeen years ago, after the Goodwood races, when Hugh had told her his life story; and she could hear now the agony in his voice when he told her that his father had gone bankrupt and taken his own life. He had said then that he was going to be the cleverest, most conservative and richest banker in the world one day--as if he believed that would ease the pain of his loss. And perhaps it would have. But instead he had suffered the same fate as his father.
